What were the charges to Bonchon from the Ultimate Parent for accounting and other software licenses in 2022?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
-----|-------------------|----------| | Bonchon U.S.A., Inc. | $ 5,271 $ | (9,785) | | Bonchon Allston LLC | (317) | (27,027) | | 267W LLC | (210) | - | | Total | $ 4,744 $ | (36,812) |
Management service agreement
On January 1, 2022, the Company entered into a management service agreement with Bonchon Holdings LLC ("BH"), an affiliated entity related through common ownership of the Parent. Pursuant to the management service agreement, the Company has agreed to reimburse BH for actual costs incurred plus a 5% mark-up in providing management and administrative support services to the Company. For the years ended December 31, 202
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon Franchise, LLC, reimbursed its Ultimate Parent for the use of accounting and other software licenses. In 2022, Bonchon was charged $119,154 for these licenses. This amount is included within "Selling, general and administrative expenses" on Bonchon's income statement.
This arrangement means that Bonchon franchisees indirectly contribute to covering these software costs through fees and other payments to the company. It's a standard practice for franchisors to centralize software licensing to ensure consistency and potentially negotiate better rates due to the larger scale.
Prospective franchisees should consider this cost when evaluating the overall financial performance of a Bonchon franchise. While $119,154 represents the total charge to Bonchon as a whole, understanding how such central costs are allocated and factored into the franchise's ongoing fees is crucial for assessing profitability.